tv Lunch Money Bloomberg December 26, 2013 12:00pm-1:01pm EST
>> welcome to "lunch money to get where we tied together the best interviews and video in business news. let's take a look at the menu today. seasons greetings from president obama, and the man who took on the president's intel machine. the best of list, straight from the launchpad. a decade behind bars. to pay street, he had back millions. we will hear from the man who supervised liquidation. how top execs kickback from building lego models to building
-- blowing stuff up. we will kick it off with the world's biggest shipping companies, who pride themselves in getting things where they need to be and doing it on time. fort was a sparse christmas some this year. shippers and retailers missed the delivery targets because of an avalanche of last-minute holiday orders. ups noted on its website that it missed some targets, and will start resuming delivery. upshere something about [indiscernible] logistics. ♪ >> music not so sweet this morning. ups and fedex did damage control over all these late deliveries. the company had a massive influx of online shopping, but
expecting it was knotted -- not good enough. >> we expect our average volume between thanksgiving and christmas will be up about 8%. we will pray for good weather and hopefully get all the procrastinators' presents to their homes on time. >> apologies abound this morning. ups said in a statement, the company is, quote -- making every effort to get packages to their destination. the volume of their packages and system exceeded capacity of our followingceeding -- christmas. fedex says, quote -- >> i think this shows the entire supply chain was overwhelmed in these last several days, and what it really illustrates for people is the extraordinary growth of e-commerce. heard -- the flip side
is waiting around to click the mouse. the company pushing those packages out the door and handing them over to fedex and good with itsmake customers, so it is offering $20 gift cards and refunds on shipping charges. amazon is still pointing the finger, saying we process those packages in time for holiday delivery -- it was their transportation network that's crude up. what comes out ahead in the court of public opinion? out ahead.omes it's too late for the retailers .o benefit for it much all the retailers who have been shipping online get a bad rush as well because they did not liver when they should have. packagesys all the will be delivered today. it will refund aaron international shipments made during the peak season, but not for ground shipments.
no guarantee for ground orders made after december 11. at a retail giant like amazon ever cut out the middleman? >> it is entirely possible that amazon could vertically integrate downstream to the shipping and fulfillment part of it. they have their own distribution centers. fleet, develop their own that is a much bigger challenge. we don't deliver stuff with drones quite yet. efficient toe contract out the way it does now with ups or usps. >>. forget about the postal service. the bottom line, realities are forget abouton't the postal service. the bottom line, realities are changing. starting january 26, stamps will cost $.49, up from $.46.
>> this is "lunch money." we are also streaming live on bloomberg.com. president obama and his first lady spent the christmas holiday with marines in hawaii. he also called military service members, including those hurt during the evacuation mission in the southern sudan earlier this week. here are the president first lady and their message to the country. >> hello everybody, and happy holidays. >> we are not going to take much
of your time, but we did want to take a moment to wish you all a merry christmas from our family to yours. >> this is a season for millions of americans to be together with family, continue long-held holiday traditions, and show our gratitude to those we love. watch aus might even little basketball or eat some christmas cookies too. house, we the white have had about 70,000 people from all across the country come visit and look at our holiday decorations. this year's theme was, gather around, stories of the season. in every room of the house, which i do tell a story about who we are as americans -- we try to tell a story about who we are as americans. here is a message with a different tone. >> hi, and merry christmas. i'm honored to have a chance to speak with you and your family this year. recently we learned that our
governments have created a system of worldwide mass surveillance, watching everything we do. britain's george orwell warns us of the danger of this kind of information. in thees of collection book, microphones and video cameras, tvs a watch is, are nothing compared to what we have available today. pocketssensors in our attract us everywhere we go. think about what this means for the privacy of the average hersen. -- person. a child born today will grow up with no conception of privacy at all. >> that was kind of weird, and what a contrast, edwards snowden delivering his holiday message via written's channel four. comparing government spy programs to george orwell's novel "1984." how is that for a season's greeting? >> i think he's a criminal who
violated the contract he signed with the u.s. government, and if he's ever captured, will spend the rest of his life in prison for it. he did indicate one of the big issues for corporate security, that major corporations have been spending billions of dollars on cyber security. what snowden showed more graphically than anything else is how a highly expert from a motivated insider can get your most sensitive data out in the open. that's what he did, and that is what corporate america is terrified about. >> for all the security, for all the billions spent on security, one guy can take down the system. it, at is the essence of highly motivated insider with the right kind of access, who knows what he's doing, can hurt you in ways. revered, snowden opened a can of worms -- or revered, snowden opened a can of worms. >> there are a number of companies that have mass amounts
of information on you. the social media economy is based on you and all the users providing data in exchange for a service, and the basic deal is you give your data, you benefit from an interesting experience online, and they can use it to market against you and to sell and have it be data mined, something you consented to. >> we talked about this on tuesday. amazon is not going to show up at my door with a warrant or because i my door gave them my shopping data. >> that's right, but the people who show up at your door have the power to serve warrants against amazon and everyone else, and get that data from them automatically in a compulsory way. when amazon is served with a war and by the u.s. government or german government, they must -- warrant by the u.s. government or german government, they must hand it over. this is right in your
wheelhouse, that these technology companies benefit from the data they gather on us, yet are not beholden to the government until they are forced. >> right. it is a fine line for these internet companies, particularly from the social media companies. it is a fine line. they have to work with and be compliant with the various government regulatory agencies around the world, but they also have to represent the interests of their users and subscribers and members. to project that at least they are looking out for the benefit of their users in terms of protecting their data and identity. >> is that why five ceo's went to the white house, to say to the president this has gone too far? >> i think that's right. what they're saying is, it's gone too far and we need to think of a new model. i need to think of a new relationship in terms of how we deal with this data, how you get
this data from us, how you access this data. what are our responsibilities? the interesting thing snowden went on to say is that there is an entire generation growing up the wilma know the concept of privacy. everything about their lives -- and the government's choice -- will be known to anyone who wants to get that data. >> i think it's overstated. there's no question that social norms are shifting about what is private and what is not. people are more educated about it. the under generation know and are willing to tolerate having more out there -- younger generation know and are willing to tolerate having more out there than they knew. >> you can watch the full discussion on bloomberg.com or on our award-winning btv+ app. we will go inside the cockpit of a helicopter. our bloomberg best
of 2013 serious. how to skin a wolf. to break, hundreds of demonstrators in the ukraine demanding the resignation of their interior minister. theattack happened after journalist published an article that was critical of the minister. the tests have rocked the country for more than a month after the president decided to scrap a deal with the european union. ♪
measures. emergency the hardest thing about an thegency procedure is anxiety and fear factor. it's the thing you have got to go over. , the helicopter is dissenting at a rapid rate. -- descending at a rapid rate. when we land with an engine, we control the speed at which we land. we are coming down, we are dissenting at 2000 -- descending at 2000 feet per minute. we perform the maneuver in three stages.
the second stage is the glide. the third stage is recovery. we level out and we use the energy in the rotor system to push our lending -- cushion our lending. >> here is a look at silicon valley's favorite way to get around, jets as high-tech as the passengers. high tech is taking to the friendly skies. the private friendly skies. private jets company jet suite is in expansion mode, fueled by high money and high-tech planes. is this on the cutting edge of technology and aviation? >> it is. most of the airplanes on the rap don't have anything like this in board. -- ramp don't have anything like this on board. i used to fly a learjet, but it was nothing compared to this. garmin g 1000
prodigy, top-of-the-line integrated. >> all the aspects of the aircraft are shown to you on the screen. it will show you which stores are open, your hydraulic pressure, oxygen pressure, emergency brake. you what your fuel is doing at that exact moment. >> i think the insides were designed by bmw? absolutely cutting edge glass cockpit. having as much technology that can help with the safety and experience is really important for jet suite. problemshas focused on in the private jet industry and special perks. >> i can live without wi-fi.
-- can't live without wi-fi. the business problems you hope to avoid in this industry? >> if you look at the private air industry in general, it's usually a lot of really big planes. the average number of people flying is between one and a half to two and a half passengers. it is the equivalent of taking a winnebago to the supermarket. >> in an industry that typically goes big to go home, jet suite is going small with a focus on tech and customer service. ,> when you think of it customer service makes a huge difference. company culture makes a huge efforts. i gravitate towards companies that care about those things. >> check out all of our videos online. go to bloomberg.com/video.
what do execs do with all their free time? this guy blows stuff up in the middle of the desert. what is life like in a russian jail? to bel khodorkovsky used russia's richest man until he was thrown in jail. ♪ >> bloombergtv is on the markets. i'm olivia sterns. stocks are rising on the day after christmas. we did get some better-than- expected data out on unemployment. jobless claims fell. tesla is expanding in china's top-tier cities.
>> this is "lunch money." we are also streaming live on bloomberg.com and your phone. tothailand, officials wanted delay an upcoming election after a ride by anti-government protesters. the clashes were sparked by protesters when they try to disrupt preparations for the february elections. testers want election rules rewritten to make sure that the family of the prime minister does not keep control. shinzo abe became the first chinese prime minister to visit the shrine and seven years.
it memorializes some world war ii criminals. pope francis delivered his first christmas day message to more than 100,000 people in front of the vatican. the pope called for peace on earth, citing conflicts in syria, south sudan, and elsewhere. peace calls for daily commitment, the pope told the crowd. once russia's richest man, mikhail khodorkovsky is now in berlin just days after his pardon by president vladimir putin. the ex-oil tycoon had spent more than 10 years in jail. mikhail khodorkovsky sat down for an exclusive interview with ryan chilcote and give us a firsthand glimpse of what it's like to actually live in a russian jail. >> describe your single most difficult day in prison. i had around 4000 difficult
days. to say which was the most difficult is pretty tough. daye the most difficult [indiscernible] , or wheny the company i learned that the company's legal counsel had died. or maybe the toughest day was when i got knifed in the face. >> stabbed with a knife? >> it's difficult. >> what was the most difficult thing about prison? >> the most unpleasant part of prison was the feeling of wasting time.
that stuff you can get used to if you have a little bit of self-discipline. i spent all of those years in prison under so-called double surveillance. >> a prison within a prison? >> yes, and even a third prison. level is where you are a prisoner like everybody else. the second level is when there is a camera trained on your station. the third level, just to give you an example, is when there are at least four other prisoners reporting back to the authorities on your every move. because president putin was personally interested in how you were treated? >> of course. 's after mikhail khodorkovsky
imprisonment, his company was dismantled and auctioned off. most of the assets were transferred. the ceo approached mikhail khodorkovsky with a preposition immediately after his release from prison. , theter you were released head of a company, to a certain extent which exists because of the assets that were part of yukos, said he would be happy to give you a job. he was joking. maybe he was actually mocking you. how does that make you feel? [indiscernible] right up to the end, he was trying to convince the country's leadership not to free me.
only because he was personally afraid of something. a man who wants to joke around with an opponent should not use the power of the state to get rid of him. >> much more of our interview online or on your mobile device with a bloomberg tv plus apps. he stole millions but only served 22 months in jail. the story of the wolf of wall street is next. building an entire city with legos. the tweet that made hundreds of thousands of tween girls cry themselves to sleep on christmas eve. justin bieber announcing on twitter that he is retiring. 40 minutes later, he seems to back off, saying i'm never leaving you.
hithe wolf of wall street theaters yesterday, a true story about a stock salesman who defrauded clients and was ordered to pay back $110 million. what they did is they went out and got all of these young kids from long island. they said, go sell. you had these young kids who went out and would tell stories to old people and flee some of their ira's and tell them stories like, you have got to -- ira's ande other
tell them stories like, you have got to make all of this money. they were driving around a 22 euros with their porches -- at 22 years old with their porsches. >> where were the regulators? >> they were there. regulators came in pretty early. all the phone calls had been taped by the time we came in. they were still selling and still lying to sell while they were being taped, and knew they were being taped. >> they knew they were being taped. is there an argument to make that these schools did not even realize what they were doing -- fools did not even know what they were doing? >> it was pure greed. the young kids were saying, were going to sell the stock and we're being told this is a stock we should be selling, so how should we be doing it?
peoplesed a lot of these and we would say to these kids, what were you thinking? >> what were they thinking? >> they wanted to be rich. it's all about sales. you don't need to tell the truth. i think what happens to people is they start off kind of small and then they say, we're going to get into something. they take a chance and step over that line, and they keep going and he gets bigger and bigger. at some point you cannot turn back. i'm not sure if he thought he was going to get caught or not. he was caught up in the sex, drugs, rock 'n roll, yachts. it was this very small community in long island. i know so many people who grew up in the great neck area who say, my father worked there, my brother worked there. they were all getting these jobs right out of school and making money. here we are, belonging to all the golf clubs and flying around. they get caught up in all of the greed.
>> slippery slope. it will happen again. you have lots of different types of companies. most brokerage firms are good. they are trying to sell stocks. they are pushing and selling, but they are selling real stocks. these were not real stocks. there was a stock called child roback's. it was posted be a great new --pany that would help obese supposed to be a great new company that would help obese children get fit. there was a warehouse in new jersey with an exercise bike. it did not mean anything. and then just up let it go drop down to zero. >> did you have any interaction with jordan? >> no. his partner, we deposed him twice. then we had all the other brokers. we never saw jordan. i'm not sure where jordan was. maybe he was already in jail. >> what was danny's story?
>> they were in it together. i think jordan was more flamboyant. danny, when he walked in for the deposition, he was very tough. he would not really talk to us. we were trying to get things out of him. unfortunately for him, he was in jail and was a different guy. he went from a guy who was flying high to a guy who was as low as you can be. that has got to do a lot to you. when it first shattered, how did the liquidation work? what was recovered, anything? >> we first had to put the story together. >> how exciting wasn't listening to these tapes? >> -- was it listening to these tapes? >> fascinating. the customers were lying too.
his letters, sell the stock. not only did they say don't sell it, they said by moore. you heard people on both sides line. we put the whole story together. it is not easy to track down the money when it is going all over the world. it was a matter of, how do we try to give these customers back something? we did the best we could, but there was not much of their -- much there. >> watch online at bloomberg.com /tv. up, constructing the chicago skyline, one lego at a time. the senior vice president of oracle after work. he likes to blow stuff up in the desert. ♪
card, a lot of kids found legos under their christmas tree. a set of plastic bricks that would make any kid and vs, including this one. he's rebuilding the chicago skyline in his apartment -- envious, including this one. he's rebuilding the chicago skyline in his apartment. >> i build large architectural buildings with legos. i love chicago architecture, and i think the skyscrapers are fantastic. lego is about building something
from nothing. a seteasy to build because the directions are there. what is creative is to do something from your own imagination. it is an unusual hobby, and it combines not just art, but science and mathematics. you haveproach work, to build a framework of what your strategy is and the youomes are and the tactics have to get done. lego is all about planning. all those buildings take more than two or three months just to figure out what the structural integrity will look like. lego buildings takes me away from the frenzy of the corporate world, relaxes me, where i can just use my hands and the creative process, take my time and build things. people look at this and it immediately comes to, i want to show my kids this year it is almost get -- this. they almost get it he -- giddy.
my dream is to build trains and train stations where they can move. i think i'm going to get there. >> kind of cool. if he plans on building a complete lego set, and wants to keep it one piece, he had better stay away from this guy. the senior vice president of hardware software at oracle corporation. when i'm not there, i can be found in the desert making fireworks, blowing things up. i started making fireworks when i was just a kid. ben you are 12, you cannot serious about making fireworks because no one will let you. when i got older, i could afford better equipment and chemicals, the raw ingredients to make fireworks. >> fire in the hole. >> there are a lot of clara wells -- parallels between developing product.
people like different textures and colors. they like a lot of things going on at one time. when i explained to people that i make fireworks, they assume that i'm nuts. it is partly true. it takes a lot of courage to make fireworks. they are dangerous. one of the things that is fascinating about fireworks to me is that it is a blend of art, chemistry, engineering, physics -- it is that energy you're able to control long enough for a short period of time. i think most people like watching fireworks, and it's kind of universal. some people actually get emotional. if take rely good music anry art disaythe, timing and colors, it does something that really affects me. i like to see what i build on what i do in the sky.
the sky.and do in >> from the desert to the ice, today's mystery meat, and what could be one of the craziest goals in the history of hockey. the buffalo sabres scoring against the phoenix coyotes in overtime. look at this. there is the puck. god, he backs into the goal. it's a goal. it's unbelievable. it bends the rules. >> the whistle doesn't goal -- go, this will be a good goal for the buffalo sabres. pants. the back of his he brings a right into his own net. -- it right into his own net. >> there you go. ♪
company. blackberry shares are down more than 35% so far this year. we are also watching twitter, optimism about the future of mobile advertising. 20%ter has surged more than just this week, and shares are up to 75% since the ipo last month. let's take a look at the broader market. stocks are rising. we did get better than expected data on unemployment earlier this morning. to 338,000.ms fell the s&p up a whopping 29%. we are also watching treasuries, not a lot of action. only up onenote basis point. the 10-year note hit 3% for the first time since september. the s&p up 29% year to date.
this morning betty liu asked the chief investment officer at fort washington investment advisors where he thinks the markets are headed from here. where are we? i think the reason i'm not in amp isper bowl -- bull c we are value investors and we are saying, this market is not cheap by any means. >> but nick, i have not met that many super bulls. 30% in the s&p, you're not going to get that next year. >> that's correct. despite all of this, there is still skepticism in the market. that actually makes me feel better. we going back to the days of the tech bubble and the like. i don't think so. i still think a lot of people
are still very cautious. the retail investor has missed most of this rally. these are the reasons i'm saying, don't get scared and pitchout. i think that would be a mistake. expectations set and say, the days of the supernormal returns, those days are behind us. the gap between the stock market and bond market is the biggest i ever remember. i'm not a young man. i never remember 30% up, 2% down. some people would say, do i rebalance to bonds. the question has to be -- i think 2014 could be a breakout year on the economy, meaning we grow more than 3%. that means higher bond yields. maybe you don't have negative returns and bonds, but at best you are flat. take the call of not being an outlier. i am saying i think you can high single-digit types of returns.
i have got to wait -- weight u.s. equities. emerging markets were negative this past year. they have trailed for three years. some people like us may say, do you dip your toe in it yet? i think it's not a bad idea, but i think it's going to be early. i still think they're going to be under pressure, partly because their economies have slowed and they don't have the flexibility to lower interest rates because some of their currencies and commodities are under pressure. sergeant withck fort washington investment. we are on the markets again in 30 minutes. "bloomberg west" is up next. ♪
live from pier three in san francisco, welcome to the early edition of "bloomberg west". i am emily chang. of focus is on the future business. let's get to the rundown. amazon's failed to deliver after ups and fedex get an avalanche of orders, it offers refunds and gift cards to make good on its holiday delivery promises. from deliveries